Apple yesterday announced its fourth quarter, end-of-year results. It exceeded analyst's expectations for its fourth quarter, ending it with some upward momentum in the US-education market due to the success of its iBook range.
The company returned a net profit of $66 million, or $0.19 per share. Analysts had expected a return of $0.16 per share. These results reflected the weakened economy - Apple returned a profit of $170 million in the same quarter last year. The profits included $1 million yielded through the sale of investments. Sales for the quarter totalled $1.45 billion, down 22 per cent from the same quarter last year.
Apple shipped 850,000 hardware units during the quarter, but saw declining sales in every line of computers except its PowerMac G4 and iBook lines. The company sold more than 250,000 iBooks, up from 89,000 in the same quarter last year. iBook sales to schools tripled in the quarter, according to research firm International Data Corp.
Safe jobs Though Apple's sales have been affected by the decline in the IT industry, the company has managed to avoid much of the sales shortages and layoffs that have hit other major computer makers.
Fred Anderson, Apple's chief financial officer (CFO), said: "We are investing in some areas, like our new retail initiative, and we are trimming where appropriate. We're trying to keep our headcount relatively flat, and we don't expect massive layoffs across the board."
As well as excellent results in terms of laptop sales, Apple also released Mac OS X 10.1 in the quarter. The OS is not without competition though - Microsoft will release Windows XP next week, and is expected to spend millions on marketing.
Think innovation Apple's CFO claimed of the competition: "We can't out spend Microsoft, and we're not going to try in terms of advertising. Apple's going to get publicity by bringing innovative products to market."
One of those new innovative products will be announced on Tuesday, Apple said. The company said in an invitation to reporters that it will unveil a "breakthrough
digital device" on Tuesday at its Cupertino headquarters. The company didn't say what that release would be, though it noted it won't be a new Mac.
Apple also ramped up its new sales channel during the quarter with the opening of several retail outlets around the US. The company is still on target to open 25 stores by the end of the calendar year, Anderson said, but he noted sales through that channel will be affected by a loss of consumer confidence following the September 11 terrorist attacks.
Sales downturn International sales in the fourth quarter accounted for 41 per cent of Apple's total sales for the quarter. All of its markets, including the US, saw a decline in sales compared to the same quarter last year.
Anderson said: "Japan was the weakest. I think the economy there is the weakest of any major geography."
Looking ahead, Apple said it expects to report fiscal first-quarter 2002 revenue of at least $1.4 billion and earnings per share of $0.10. The company hadn't given any previous guidance on the quarter. It didn't give any guidance on full-year 2002 expectations, but said it doesn't expect to see any rebound in sales until the second half of the fiscal year.
Anderson said: "I would tell you that the main impact is the top line, meaning sales, and we're cautious about sales as we approach the holiday season. As we look to next year and the December quarter, we just don't have a feel for the consumer market, and what that environment's going to look like."
Apple closed at $16.99, down 6 per cent. It's financial results were announced following market close.